BMI View: After stabilisation in 2016, we forecast renewed downside to Azeri
oil production from 2017 driven by the country's maturing asset base and a lack
of new output brought on stream. Condensates production from the Shah Deniz
Phase II will offer temporary upside in 2019, but this will be insufficient to
sustainably reverse the overall trend of decline. Our outlook on gas production
is broadly bullish, with substantial reserves under development and a strong
prospective resource base. The refining sector will continue to struggle, due to
low complexity and ageing infrastructure and a continued lack of investment.

Latest Updates and Key Forecasts
-The country boasts substantial, prospective and underexplored acreage, in
particular offshore in the South Caspian basin. SOCAR has also announced plans
to restart onshore exploration, targeting ultra-deep oil deposits.
-A shortage of drilling rigs continues to delimit drilling activity in the
Caspian Sea. A spate of exploration and appraisal, development and production
wells are set to be spud by 2017; SOCAR needs to secure additional drilling rigs
in the coming quarters if it is to avoid the emergence of a major bottleneck in
its upstream.
-Oil output decreased in 2015, according to reports by SOCAR. In part this
stemmed from planned maintenance works, but the bulk of the loss came from
faster-than-expected depletion rates at the major ACG fields. After a temporary
stabilisation we expect this trend to continue in 2017, despite increased gas
reinjection boosting recovery.
-The gas sector is set for strong growth, driven in large part by development of
the Shah Deniz II, which reached FID in 2013 and is targeting first gas from
2018.

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Oil and Gas Defoaming Separator Market Report by Material, Application, and Geography - Global Forecast to 2021 is a professional and in-depth research report on the world's major regional market conditions, focusing on the main regions (North Americ...